How the US Fed thinks a Bitcoin ban could preserve deficit spending
A ban on Bitcoin? Even the suggestion as part of a thought experiment is bound to chafe the crypto community.
Bitcoin has been called many things, but a “balanced budget trap” is probably not one of them. Or at least not noticeably — until now.
A recent paper published on the Federal Reserve Bank of Minneapolis website suggests that Bitcoin (BTC), or something like it, could one day force the United States federal government to balance its budget.
That would arguably vex policymakers and legislators because they want to keep all their spending options open in case of serious emergencies, like a COVID-19 pandemic or a recession. A burst of spending can stimulate an economy, after all.
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Author: Andrew Singer
